How to Fund College Without a College Savings Fund

The recent market downturn has cut many college savings funds in half. Parents and college-bound kids are going to have to make some tough choices between now and next fall, and the toughest of those choices will be dealing with the financial reality that a large portion of their college funds are gone.

These days most families turn to student loans, but what if you don't want to go into debt? Or you want to minimize the number of loans you take out? You still have plenty of options, as outlined below.


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    Reconsider your choice of school. Before committing to a school, be sure to investigate how much you and your family will be expected to contribute to your education, including loans. Depending upon your academic performance and choice of school, costs can vary widely.
    • Private and ivy league schools offer prestigious diplomas, but they also can mean you will graduate with a pile of student loans and credit card debt. However, this is not always the case. Because of their large endowments, top private schools may be able to offer better aid packages than less expensive schools, and some (e.g., Princeton) have committed to a "no-loans" aid policy.[1]
    • Investigate local and State universities. The tuition is usually considerably less. Many offer special scholarships or financial aid opportunities to residents.
    • Some people save tens of thousands of dollars by attending a community college for the first two years and taking classes that they know will transfer, since what really matters to employers is where you graduate from, not where you started. When you get a degree from a certain school, it means you've met their academic standards, whether you started there or not.
    • If your grades weren't that great in high school, attending a community college can be a good opportunity to work hard and establish relationships (i.e. references) that you can parlay into scholarships when you transfer.
    • Research suggests that how much money you'll eventually make is not about how elite the school is that you go to; it's how ambitious you are. People who apply to but get rejected from elite schools make just as much money as those who get accepted and attend![2]
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    Ask for help from friends and family. They might be able to give you a low interest or zero interest loan. There is also a type of social investing market lead by Freshman Fund, which ties the child’s Freshman Fund account to existing 529 college savings plans, and then shares the student’s profile with family and friends. Contributions are collected and deposited directly into the 529 plan behind the scenes (no need to share account numbers, etc. with extended family).
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    Apply for every scholarship under the sun. Consider it your part time job to apply for as many scholarships as possible. Enter writing competitions, join various associations, and basically spend every free moment researching scholarship opportunities. Even if you applied for 1,000 scholarships and 990 of them turned you down, there is a chance those remaining 10 could finance a year of school (or at least offset some of the costs of that first year). One student earned almost $90,000 from merit scholarships![3] And don't assume scholarships are only for geniuses and athletes. If you dig deep enough, you can find peculiar scholarships, like a nearly full scholarship for having enough spirit to be mascot, or $5,000 to the couple who goes to prom with the best outfit or accessories made out of a particular brand duct tape, or full-tuition four-year scholarships to Catholics with the last name of "Zolp" on their birth and confirmation certificates.[4]
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    Get a part time job. This one is a little controversial because some argue that part time work detracts from the college experience, or leads to lower grades. Most people who've done it will admit it was a drain, but also confirm that they appreciated things far more than if their parents paid for everything. Plus, balancing a job with school allows a student to develop discipline, learn how to budget their money, and build time management skills.[5]
    • Look into becoming a resident adviser; you may be able to get free room and board or a break on tuition.
    • Don't push yourself so hard that you fail courses and have to retake them, in which case college is costing you more because you'll have to stay there longer.
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    Work full time for tuition reimbursement. Many companies offer tuition reimbursement plans to their employees. Start by researching companies in the field you are ultimately interested in studying. Most company websites offer a list of perks included in their benefits package, and if you have questions about tuition reimbursement eligibility, contact the company’s human resources office (or recruiter) usually listed on the job search page.
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    Live at home and stay local, or commute a short distance. Room and board can add significant costs to already inflated tuition costs. If you are short on cash you might be able to pull off tuition-only and stay and stay on the “Mom and Dad” meal plan. As a compromise, at least consider living at home your first year or two and then look for a reasonable off-campus option for the final years at school.
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    Take a year off to save up the cash. Again, not a popular option for most high school seniors eager to get started on college life. But families need to be realistic; if the money isn’t there it just isn’t there. And with many people being laid off, or at least fearing they may be laid off, most parents are reluctant to try to cash flow tuition at an expensive school. It might make sense to take a year off, work full time while living at home, and save every single dime you earn towards the next year’s tuition. In addition, this is a good time to find yourself and think about what career you would like to pursue. Flipping burgers for a year can create an unrivaled motivation for doing well in school and making sure you'll never have to flip burgers again!

    • The only case in which you really shouldn't do this is if you're offered scholarships. Those scholarships are probably not available to transfer students.
    • You may also be able to defer your enrollment for a year, and in this case you may be able to keep your scholarships; make sure to ask.
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    Plan early and take High School Seriously. Every A you get in a hard class in High School qualifies you for Merit Based Scholarships. It is a great way to pay for college and to prepare yourself for the rigors of college classes.


  • If you commute to school, you'll miss out on opportunities to socialize that people who live on campus take for granted. But that's fine, because networking is one of the most valuable skills you can learn, and by taking an active approach to making friends (rather than having it presented to you on a silver platter, which it will never be in the real world) you'll become a more well-rounded individual.
  • Try to get a work-study position in the cafeteria. Although not a high-profile (or high-paying) position, the hours are predictable, you can meet TONS of people, and often can eat for free or at a great discount. When you're watching every dime, the savings on food can add up to a LOT!
  • Another idea is to focus completely on school and squeeze a four-year education into three years. With dedication and discipline, it's possible, and you'll probably save thousands, perhaps tens of thousands, of dollars. Taking college-level classes while in high school will help immensely with this.


  • It is not healthy to play the blame game. Many parents are mad at themselves for not rolling funds into cash last year, and many students are equally mad at parents for losing so much of their college fund. Being mad at yourself, or resentful towards your parents accomplishes nothing. Now is the time to pull together as a family and work to find a solution that works best for everyone involved.
  • High school seniors, resist the temptation to take out huge student loans. The money is there, and you don’t have to pay it back for a few years, but you will have to pay it back. When you graduate college you will be filled with the excitement of getting started in your career; don’t spoil it by tying a noose around your neck and hanging four years of student loans from it. Those loans will limit your options, and are often the gateway to other forms of debt such as credit cards and car loans. Make the sacrifices now so you don’t have to make them later.

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